Ref. Ares(2021)3564171 - 31/05/2021
Cal between Commissioner Breton and European energy-intensive industries
Online, 25 March 2021 at 10.00
BRIEFING NOTE (Commission Internal)
The energy-intensive industries (EIIs) are at the core of the real economy with
links to each other and to key European value chains. This is your third cal with
the key EI CEOs, the previous cal s took place on 8 and 20 of April 2020.
This meeting with the energy-intensive industries wil al ow you to:
• Hear the EIIs’ expectations regarding the Industrial Strategy update;
• Discuss how the Fit for 55% package can support investment in clean
technologies and provide effective carbon leakage protection;
• Check EII’s financial needs for the recovery and how to accelerate
investment to EI s’ green and digital transition.
o Initial remarks by Commissioner Thierry Breton
o Updates by the EIIs on the above mentioned topics, chaired by
Commissioner Breton. The speakers have coordinated their interventions
(main topics mentioned in brackets), it would be important to respect the
time limits (5 minutes each) to ensure that al topics covered.
Solvay Executive Committee &
Member of Solvay Board of Directors
(Industrial Strategy, Low carbon products markets, Decarbonised energy)
(Decarbonisation Roadmaps, Regulatory framework, Competitiveness)
(Investments, Financing of breakthrough technologies)
(Carbon Border Adjustment Mechanism)
(ETS, policy coherence)
(Biomass, stability of sustainability standards)
o Discussion (15 minutes)
o Wrap-up & next steps (5 minutes)
• Transitioning to a climate neutral and circular economy by 2050
will require full mobilisation of industry together with a significant
• Energy intensive industries are at the core of the transition and
supply many key industry sectors (automotive, construction,
machinery, agriculture, health, etc.) and disruptions in these
sectors have severely affected your companies.
• The Commission is updating Industrial Strategy to better respond
to the impact of the pandemic but also due to the more ambitious
2030 climate targets.
• I would like to hear today what are your expectations regarding
the Industrial Strategy, what are key issues you would like to be
• Relating to the new climate targets, I would like to hear your
reflections on what it takes to provide effective carbon leakage
protection for your industries.
• The climate targets require accelerated investment in clean
technologies. The funding under the Recovery and Resilience
Facility provides an unprecedented opportunity for this:
o Have your industries had constructive dialogue with the
Member States during the drafting of their national plans?
o How about the possible IPCEI on low-carbon industries,
have you found interested Member States?
o What are your views on carbon contracts for difference or
other temporary support schemes addressing OPEX.
After intervention of Ilham Kadri
• You have often communicated that access to affordable,
is one of the key issues for industry, to
make the vast transformational investment to green production.
• Access to low carbon and affordable energy combined with
creation of markets for low carbon products
are key conditions
for having a business case for transitional investments
• Al policy tools available are to be used to create a business case
for transformative investments at company level.
• We wish to provide you confidence that supply of clean energy wil
not become a bottleneck for industry’s green transition.
• This is of course a complex issue, but we wish to do the utmost
with the industrial policy measures in our hands (public
procurement to accelerate investment in renewable energy
sources, standardisation to facilitate permitting, promoting
production of renewable energy technology in the EU etc.)
• We ful y share your views on importance to preserve
competitiveness during the transition.
• Green and Digital transition offers great opportunities for Europe
to strengthen its global competitiveness, the EU needs to shape
these new markets and to exploit the first-mover advantage.
• Some Member States have drafted transition pathways
with industry stakeholders, to plan effective public measures. We
are considering to introduce this idea as part of the industrial
strategy, for each of the 14 industrial ecosystem.
• For the EI ecosystem this would not require much of additional
effort, as many of your sectors have already conducted such work.
Also the EIIs’ 2050 transformation Masterplan that was developed
a year ago is still valid.
• The novelty would be integration of the digital dimension. I think
the opportunities it could provide also for your industries to
modernise operations and to create new business opportunities
that have not been fully grasped.
• I would like to draw your attention to the upcoming Skil s
It is clear that the skil s angle should not be forgotten
as most ecosystems see lack of skil s as a key bottleneck for dual
transition going forward.
• On 10 of May, the (online) roundtable on skills in EII will take
place. The roundtable is to prepare the ground for a skil s
partnership in EII sectors with a Charter to be signed in the future
• Creating business case for transformative investments at company
level and addressing investment chal enge of dual transition are
the key task going forward.
• The Recovery and Resilience Facility provides a unique opportunity
to accelerate the twin transition, funds should be used in most
• Innovation is crucial for keeping a competitive edge. With targeted
innovation in key technologies such as renewable hydrogen, the
EU wil be able to scale up in the markets that are expected to
grow global y in the coming years.
• The transition wil require cooperation and pooling of resources as
in the case of hydrogen and batteries. My understanding is that
EIIs are leaning towards preparation of an IPCEI for low-carbon
industry, we will follow with interest this new development.
• I believe
was planning to talk about ETS, let us take
CBAM and ETS point together as they are closely interlinked.
• I share your views that industrial transition requires creation of
the new predictable policy framework.
• Currently, the Commission plans to table a proposal for a CBAM by
June 2021. Already in December 2019, in the European Green
Deal, the Commission announced it wil make a proposal for a
CBAM for selected sectors in 2021.
• Commission services are completing a thorough assessment of
impacts of various options for establishing a CBAM, such as a tax
at the border of the EU, an internal carbon excise charge, or a
system of mirroring the EU ETS, as wel as coherence and
complementarity with other measures under the European Green
Deal, notably the revision of the EU ETS.
• I know you already exchanged views with DG GROW services on
this point. Indeed it would be important for us to have a good
understanding of how you see these two instruments working
together, especial y in the view of a possible phasing out of ETS
free al ocations and also keeping into considerations indirect costs.
I think the timing of CBAM entry into force is also an aspect to
careful y consider.
• Importance of Raw materials for dual transition and resilience of
our industrial ecosystems is wel understood and reflected in our
• Implementation of the Critical Raw Materials action plan is among
the key deliverables in this regard.
• There is clearly the need for coherence among the measures,
including continuity and predictability on various issues like
treatment of free al owances in the ETS reform and treatment of
• We wil follow biomass issue closely during the revision of the
Renewable Energy Directive.
• We had a good exchange of views and would like to continue this
dialogue, including through the High Level Group on Energy
, the fora that proved very useful for enabling
transition of EI s. High Level group was renewed last year and the
selection of members to reflect better ecosystem approach was
finalised earlier this month.
Defensives / Q&A
: What are your views regarding chemicals industry’s call
for a sectoral Green Deal for chemicals (to help fulfil the enabling
role of Europe’s chemical industry)
: The Commission is not in favour of a sectoral green deal
since the Chemicals Strategy integrates the main objectives of the
Green Deal into a holistic and coherent roadmap on the future of
chemicals policy. The Strategy announces a set of actions and
incentives to promote the green transition of the sector and of its
value chain through various funding instruments. It also seeks the
engagement of Member States to ensure the mainstreaming of the
transition to safe and sustainable chemicals across EU funding
programmes and national recovery plans.
: What are your views on the adoption of the 2030
: The objective of the 2030 Climate Target Plan, adopted on
17 September, to adapt the current 2030 targets is to prepare the
EU for the transition towards climate neutrality by 2050. This will
be done by proposing a plan to increase the EU’s GHG emission
reductions target for 2030 to at least 55% (as compared to 1990
levels) in a responsible way and assessing its feasibility as well as
economic, social and environmental impacts. To deliver these
additional reductions, the Commission will, by June this year,
review and propose to revise where necessary, all relevant climate-
related policy. These concrete measures that will need to be
developed to achieve intended climate objectives will be subject to
detailed impacts assessments.
:Would the Commission authorise contract for difference
for low carbon steel?
: The issue of contract for difference is one of the topics
included in the revision. Stakeholders were asked for feedback on
the possibility to allow decarbonisation support through carbon
contract for difference and on their advantages and
disadvantages. The Commission is still reviewing contributions.
Carbon contract for difference are contracts between the
beneficiary and a counterpart (generally mandated by the State) in
which the beneficiary is paid for each ton of CO2 emission avoided
per ton of product that he produces an amount of money
corresponding to the difference between his CO2 emission
avoidance costs and the price of ETS allowances.
Contract for difference can strongly affect the functioning of
markets. They also provide beneficiaries with important
competitive advantages as they can shield beneficiaries from
market fluctuations and market risks. Support through carbon
contract for difference should therefore be assessed with care and
would in any event have to be subject to important safeguards like
competitive bidding across sectors to ensure that amount of aid
and competition distortions are limited to the minimum as well as
mechanisms ensuring that beneficiaries remain exposed to market
signals. Also, it must be ensured that CO2 emission reductions
materialise and are not just displaced to another sector. Finally,
scheme design must ensure that the aid covers only extra
environmental costs but does not lead to capacity increase or cover
costs that the company would have to incur anyway. A
decarbonisation scheme meeting those conditions has recently
been approved by the Commission (Dutch SDE++ decarbonisation
: How will the CBAM articulate with the EUs present
emissions trading scheme (where ‘free allowances’ currently
compensate certain sectors)?
: Over time, the CBAM could replace measures that
currently address the risk of carbon leakage under the EU ETS. The
CBAM is not designed to protect European industry from
competition but rather to ensure the environmental integrity and
effectiveness of EU climate policies as they apply to its trade-
The design of the CBAM will complement the EU’s carbon pricing
policies (in particular the EU ETS) which will remain the
cornerstone of the EU’s climate policies. The EU internal market
will stay open to foreign competition under the applicable rules.
The EU is a staunch defender of rules-based trade order and wil
comply with its international obligations and the rules of the World
Trade Organisation (WTO) in particular.
: What will the CBAM scheme look like?
: There is a breadth of considerations that need to be
reviewed in the design and implementation of a CBAM.
Commission services are completing a thorough assessment of
impacts of various options for establishing a CBAM, such as a tax
at the border of the EU, an internal carbon excise charge, or a
system of mirroring the EU ETS. The assessment of the options will
not only look into their economic, social and environmental
impacts, but wil also consider feasibility and practical
implementation, administrative burdens and compliance costs.
: What will it cover? How will the scope of affected
products be decided?
: The assessment also includes a careful and impartial
selection of sectors and products that should be subject to the
CBAM from the outset, reflecting also the possibility of extending
the scope to other products later in the implementation. Indeed,
clear and stable investment climate is necessary to make the
appropriate carbon-abatement investment decisions.
: When will it be unveiled? When will it take effect?
: Currently, the Commission plans to table a proposal for a
CBAM by June 2021. Already in December 2019, in the European
Green Deal, the Commission announced it will make a proposal for
a CBAM for selected sectors in 2021.
According to the agreement signed by European Council the
European Parliament and the Commission on 16 December 2021,
CBAM revenue should be in place in 2023.
: How is the Commission preparing the proposals? Are
there consultations with partners?
: As part of the impact assessment, the Commission has
consulted citizens and stakeholders and encouraged them to give
their views on the best option to enforce ambitious policies against
climate change in an open economy while addressing the risk of
carbon leakage. The Commission received contributions coming
from 38 different countries. In line with our commitment to
transparency the inputs for the consultation were published on the
Commission’s central consultation page on 6 January 2021.
A thorough impact assessment is ongoing, examining economic
efficiency, environmental, social and financial impacts of the
various options for a CBAM and their feasibility as wel as
coherence and complementarity with other measures under the
European Green Deal, notably the revision of the EU ETS. Any
proposal wil have to respect the WTO rules and our trade
agreements, as well as other international commitments.
Following the presentation of a legislative proposal, the EU will
continue to be ready to engage in discussions with its partners in
the WTO and other fora. This wil enable taking account of
legitimate concerns from trading partners. This engagement could
also include discussions on how to ensure proper cooperation as
regards measures taken by countries to tackle carbon leakage.
link to page 11 Background information
Name of Cabinet Member: Joan Canton
Name of the Director who has cleared the briefing: Joaquim Nunes de Almeida
BASIS request ID: (CAB BRETON/800)
Room, time: online, 25.3.2021 at 10.00
Participants: CEOs from EII sectors and managing directors of the corresponding sectoral EII
associations (will attend in listening mode).
Name of main contact person:
Energy-intensive industries (EI s)1
are the key enablers for the transition of the EU’s
economy to climate neutrality and for achieving goals of the Green Deal.
European EIIs ecosystem provide direct employment to around 8.3 million people and
contribute to around 4.87% of EU value added. EI s have 15% share in total EU greenhouse
gas (GHG) emissions and are main industrial GHG emitters and energy consumers. EI s are
closely interlinked between themselves and other key value chains and sectors. EI s are the
potential driving force in greening the respective value chains (both upstream and
downstream) and providing necessary economies of scale for kick starting new markets
Substantial changes in the policy framework are needed to ensure the right conditions and
business case for the transition of the EI s to climate neutrality. The most important issue is
the lack of a business case for EI s transition to climate neutrality, as clean products will cost
more to produce (higher Opex) and wil require significant upfront investments (higher
The new Industrial Strategy announced an industrial alliance on low-carbon industries to
pool resources for demonstrating breakthrough technologies at industrial scale, but EI S
signal ed recently preference for IPCEI and started discussions with MS. The High-Level
Group on Energy-intensive industries has been the key forum for the dialogue with the EI s
regarding the transition to climate neutrality. In November 2019 the High-Level Group on
Energy-intensive industries issued an Industrial Transformation Master Plan on how and
under which conditions these industries could transition towards climate-neutrality and
circularity by 2050.
What EIIs propose/need for their recovery after the COVID-19 crisis
• Boost Major Infrastructure projects
These can create demand for many foundation products from large and small EI
companies, steel, metals, concrete, plastics, bitumen, etc. and fuels for logistics &
• Boost Public procurement
1 The most energy-intensive industries in the EU are steel, chemicals, cement, refining, ceramics & refractory,
ferro-alloys & silicon, fertilizers, glass, lime, non-ferrous metals and pulp & paper.
Build strategic stocks across EU of pandemic response materials and other critical
industrial products; Maintain demand for some products to stop plant shut-downs, with
knock-on effects for other products
• Ensure Health of Automakers, Parts and Engineering/Manufacturing Industries
Restore demand for Steel, Aluminium, plastics, textiles, electronics, etc.
• Protect and Support SMEs
They are vital for transport, construction and services for many major projects, but
extremely vulnerable now.
• Work on developing/fil ing the policy gaps, Industry Master Plan vs Green deal
The creation of lead markets for low-carbon products;
o mapping future infrastructure needs
o Inclusive of wider range of industrial technologies
o planning for access to abundant, affordable and sustainable energy and materials
o revision of State Aid rules
• Try to achieve long term regulatory stability and predictability
To rebuild some loss of confidence from international investors in the EU economy
Fit for 55 – Energy-intensive industries
In the “Masterplan for a Competitive Transformation of EU Energy-intensive Industries
Enabling a Climate-neutral, Circular Economy by 2050”, the High Level Group on Energy
Intensive Industries has highlighted the need for rapid progress on the demonstration of
first-of-its kind technologies by 2030, considering the short time left until 2050.
EI are therefore calling for an enabling regulatory framework and specific supporting
creating the framework conditions for the transformation of these sectors. The
determining factors to al ow the green transition of energy-intensive industries can be
summarized as follows:
Abundant and affordable decarbonised energy, in particular electricity.
emissions industrial production requires significant decarbonized electrification and climate-
neutral fuel switch, in order to get significant GHG reduction after the year 2030 (e.g. net
zero production of cement, steel and chemicals in 2050 will require 2 – 3.5 times more
electricity than in 2015). It needs to be available at the scale required, competitively priced
and affordable to support EU industry in its pathway towards climate neutrality.
Investments in production assets, R&I, demonstration and deployment of new
technologies and infrastructure
(e.g. electricity grids, energy system infrastructures, energy
storage technologies, CCUS and CO2 transportation pipelines). In this regard, to be noted
that investment cycles should also be taken into consideration as innovation will not follow a
linear path. Disruptive breakthrough technologies needed for the climate-neutrality
objective require sufficient time to be developed, upscaled and commercialised.
Digitalisation and transformation of business models.
Current digital technologies
can contribute to reduce 15-20% of total current CO2 emissions. Lead companies in Europe
are keen to launch a digital coalition to set their carbon neutrality pathway, and it is the right
momentum to build upon this initiative.
Foster demand for green products and competitiveness on export markets.
European companies still have a clear competitive advantage compared to international
competitors when it comes at the quality of the products and their sustainability features. In
order to strengthen this as a market competitive advantage we must create the conditions
to massively promote the uptake of sustainable products and to support companies and
sectors that are export an important part of their production. This could be done both
through economic measures (like a CBAM that also includes export rebates) but also through
a wise trade policy, creating the conditions for our companies to enter the future “green”
markets in developing countries.
Recyclability and possible change in raw materials.
The transition to renewable
energy and digitalisation will significantly increase the demand for raw materials, not only
for high-tech applications but also for infrastructure. Europe is performing well in terms of
recycling for some materials. For other materials, especially those needed in renewable
energy technologies or high tech applications secondary production represents only a
marginal contribution. A secure and sustainable supply of raw materials, both primary and
secondary, is paramount to enable the transition to a climate-neutral economy.
In the light of all these critical factors, possible increase of EI s’ carbon leakage exposure
should be assessed alongside
the revision of the 2030 climate targets as it is inherently
linked to our climate targets. Carbon leakage measures should be commensurate with and
effective for the high level of pursued climate ambition.
When it comes more specifically to ETS
, and in particular to effort sharing, EI underline that
it will be particularly important to strike the right balance between ETS sectors on one hand,
where emissions have significantly reduced, and non-ETS sectors on the other hand, which in
many cases have seen a stagnation or increase of their emissions. This will be needed in
order to prioritise the sectors where most efforts to reduce GHG emissions are necessary.
European Hydrogen Strategy (8 July 2020)
The Hydrogen Strategy considers in particular the potential of renewable hydrogen potential
to decarbonise difficult sectors like industry and transport, but at the same time helping to
manage our electricity system and providing storage. Today, hydrogen is mainly a feedstock
in industry and is produced from natural gas. In the future, hydrogen will become a new
clean energy carrier, along with electricity.
Hydrogen and renewables are expected to be part of several of the national Resilience and
, while several Member States have also presented, or are working on, their
own hydrogen strategies and respective budgets to support them.
The European Clean Hydrogen Alliance, launched on 8 July, is open to all stakeholders that
wish to contribute to strengthening of the European hydrogen capacities in concrete large-
scale projects. It will support the necessary investments along the whole hydrogen value
chain to build up a robust project pipeline for clean hydrogen in Europe. The proposed
recovery package, Next Generation EU, like the general budget, will have earmarked funds
for delivering the climate goals of the European Green Deal. The Commission will closely
work with Member States to ensure that there is a strong emphasis on hydrogen related
projects in the national measures. The Strategic Investment Facility that the Commission
proposed will be able to unlock 150 billion euros to invest in key technologies and value
chains, like hydrogen technologies.
The European Clean Hydrogen Al iance
The six thematic roundtables of the European Clean Hydrogen Alliance will elaborate a
project pipeline that delivers on the 2030 objectives of the EU Hydrogen Strategy and
strengthens the EU dimension and industrial capacities. Some of these hydrogen projects
will require public investments from a number of Member States to be viable.
In preparation of large collaborative multi-country projects, several Member States have
launched national cal s for expression of interest for a hydrogen Important Project of
Common European Interest (IPCEI). On December 2020, 22 Member States and Norway
signed a manifesto for the development of a European clean hydrogen value chain,
recognising the importance of promoting cross-border col aboration and of working on
large-scale joint investment projects in order to support the development and deployment
of hydrogen technologies and systems. Industrial applications of hydrogen are explicitly
mentioned in the scope.
Replacing fossil energy by hydrogen generated with renewable energy enables significant
decarbonisation of the chemical sector.
The value chain for hydrogen needs to be built at the same time as the industries transition
to use renewable and low-carbon hydrogen, so that sufficient quantities of renewable and
low-carbon hydrogen will be available at an affordable cost. This requires significant
expansion of renewables capacities and potentially also imports of renewable and low-
The European Green Deal underlined that “should differences in levels of ambition
worldwide persist, as the EU increases its climate ambition, the Commission will propose a
CBAM, for selected sectors, to reduce the risk of carbon leakage
”. Indeed, a pillar of the EU
climate policy is carbon pricing in the form of the EU Emission trading system (EU ETS).
However, as long as international producers do not incur costs comparable to the EU’s, there
is a risk of carbon leakage either because production is transferred from the EU to other
countries with lower compliance costs for greenhouse gases (GHG) emissions reduction, or
because EU products are replaced by more carbon intensive imports. A CBAM that places a
comparable price on selected imported products can contribute to mitigating the risks of
The European Green Deal Communication and the European Council conclusions of 12
December 2019 provide the main context and background for this initiative. It has been
confirmed by the proposal for a European Climate Law and with the 2030 Climate Target
Plan to reduce GHG emissions by at least 55% compared to levels in 1990. This will be
brought together under the ‘Fit for 55 Package’ which will cover, in particular, the review of
sectorial legislation in the fields of climate, energy, transport, and taxation, alongside the
proposal for a CBAM, as laid down in the Commission Work Programme 2021.
The aim of a CBAM is to ensure that reinforced internal EU decarbonisation efforts, through
measures aiming to help meet the temperature goals of the Paris Agreement, do not
engender counterproductive effects at the global level. It should be seen as a necessary
element of the tool box designed to ensure the environmental integrity and effectiveness of
EU’s climate action. The measure will be designed in full compliance with WTO rules. In any
case, before developing, proposing and adopting the CBAM, the European Union should
consult with its trading partners.
In the interinstitutional agreement on budgetary matters signed on 16 December with the
European Parliament and the Council, the Commission committed to propose an own
resource based on CBAM. However, the budgetary potential of the measure is not an
objective in designing the measure nor in selecting the sectors. It is important to pass the
message that the main objective is and wil be the fight against climate change
Skil s Roundtable.
• On 10 of May, the (online) roundtable on skills in EI will take place. The roundtable is to
prepare the ground for a skills partnership in EI sectors with a Charter to be signed in
the future (2021/2022).
• We expect participations of high-level representatives of the EII ecosystem - CEOs of
large (multinational) companies and SMEs, social partners, regional cluster and
vocational education and training (VET) provider.
• The primary objectives of the roundtable of 10 May will be to:
o Discuss the challenges within EI ecosystem in terms of upskilling and reskilling to
support the shift towards the green and digital transition;
o Identify the scale and type of support needed for skil s development at the
European level and, in particular, how the Pact for Skills can support skills needs
in EII sectors;
o Obtain commitments from the participants regarding their contribution to the
Pact for Skills in EI sectors.
Biomass and sustainability
• New issue that EI CEOs will raise - concern about EC plans on biomass in RED. EIIs are
concerned that European Commission’s modelling is wrong as it only assumes big
future need from power sector, ignoring its use as feedstock in EI s like chemicals or
• EIs are also concerned about the big NGO campaign on toughening up sustainability
criteria in the Renewable Energy Directive (38K campaign replies organised by NGOs).
EU Chemicals industry
Chemical manufacturing is the fourth largest industry in the EU and 59% of chemicals
produced are directly supplied to other sectors, incl. health, construction, automotive,
Global sales of chemicals were EUR 3347 billion in 2018, and is expected to double by 2030.
However, the EU’s global sales share is on the decline. With a forecast of moving from 2nd to
3rd position by 2030, being overtaken by the US while China remains number one and on the
EU chemicals industry: facts and figures 2018 (Source: Cefic)
EUR 565 billion
Number of companies
EUR 21 billion
EUR 10 billion
Global sales share
Chemicals will be a key enabler for the European Green Deal as chemicals are the building
blocks of low-carbon, zero pollution and energy- and resource-efficient technologies,
link to page 16
materials and products. Increased investment and innovative capacity of the chemicals
industry to provide safe and sustainable chemicals will be vital to offer new solutions and
support both the green and the digital transitions.
As regards the chemicals strategy for sustainability, Cefic supports its vision and objectives,
but has been critical on the number of legislative proposals announced. They consider that
the strategy is not specific enough on how innovation and the industrial transition wil be
supported. It lacks connection in their view to the real-world geopolitical context and it is a
missed opportunity for delivering on the European Green Deal as a growth strategy. Cefic’s
ultimate fear is that an uncoordinated policy combined with weak enforcement risks
outsourcing the Green Deal technology solutions to other parts of the world.
Concerning Fit for 55, Cefic and other Energy-Intensive Industries are calling for an enabling
regulatory framework and specific supporting measures creating the framework conditions
for the transformation of these sectors. In particular, Cefic considers that the burden-sharing
between ETS and non-ETS sectors should be rebalanced and the former’s share in the EU
ambition should be reduced as industry is exposed to global competition. It also calls for a
number of specific reforms of the EU ETS and opposes its extension to transport and
buildings (i.e., under a common cap). As concerns the future Carbon Border Adjustment
Mechanism (CBAM), Cefic insists that it should be complementary to (and hence not replace)
the free al ocation principle under the current ETS. It should also take into account the
specific characteristics of the chemical industry, in particular its strong export orientation
(requiring a mechanism that addresses the additional cost for exports) and the presence of
very long and complex value chains (which calls for a reasonable product scope of the
CBAMs and necessitates measures not entailing high compliance costs or administrative
Their position is that:
Europe’s chemical industry wil be key to build the solutions needed for
climate neutrality (e.g. for insulation panels, wind turbines, electric batteries), for
which toxic chemicals are needed,
the chemicals industry needs support in order to decarbonise its own
CEFIC has called for a sectoral Green Deal for chemicals to help fulfil the
enabling role of Europe’s chemical industry. This sectoral deal for chemicals is
presented as an integrated approach to the massive changes for chemicals industry
leading to a massive investment need.
EU Fertilisers industry
According to Eurostat and the Fertilisers Study2
, the EU fertiliser market, is an economic
sector that has between EUR 20 billion and EUR 25 bil ion in annual turnover.
Around 95 000 to 100 000 jobs (expressed as Full Time Equivalent) are involved: i.e.
approximately 1% of European Gross Value Added for the whole manufacturing sector and
0.2-0.3% of the workforce in manufacturing.I n the inorganic fertilisers (which are
international trade commodities), large companies represent 75% of the total market value
and 75.000 employees for a turn-over of EUR 9.8 billion according to FE.
The inorganic fertiliser’s business represents 80% of the EU fertiliser market. The main
building block for the production of these fertilisers is ammonia, which is made of nitrogen
and hydrogen. Currently, roughly 70% of hydrogen feedstock is produced from natural gas
through reforming, thus generating large amounts of CO2, which is reused to some extent
(dry ice, food/beverages…). This can be changed to hydrogen from electrolysis of water.
Switching from today’s hydrogen production to ultra-low-carbon hydrogen would al ow to
eliminate GHG emissions either entirely or in large part.
The use of electrolytic hydrogen as a feedstock for ammonia production is currently at
Ensuring abundant green hydrogen is a big chal enge, because it takes 6-8 times more
energy to make hydrogen from water than from natural gas or oil. Another hurdle to
overcome is the much higher production cost for ammonia if it were to be produced today
with this low-carbon technology: at least two times higher than the fossil alternatives under
Moreover, ammonia also provides a promising carrier for the transportation of hydrogen -
that would be thus bound in bigger molecules which are easier to transport.
CVs of the interlocutors